The need to establish appropriate, adequate, and decent educational facilities for school children across the nation has been well-established. The ability of school districts in each state to build these facilities has varied widely in the past. Historically, most facilities funding ability for school districts has come from the local community and has been tied to property wealth and the ability of the community to raise significant tax dollars to pay for school buildings. Responding to an expanding need for increased facilities funding and school funding litigation, the state of Texas added facilities funding mechanisms for public school facilities construction in the late 1990s. The purpose of this study was to determine whether or not the methods of facilities funding were equitable in the state of Texas. In this study, equity values were framed around three equity concepts established in school funding equity literature. These three concepts were (1) horizontal equity defined as the equal treatment of equals, (2) vertical equity defined as the unequal treatment of unequals, and (3) wealth neutrality defined as the absence of a relationship between school district wealth and the equal opportunity of students. The sample comprised 1,039 school districts in the state of Texas. Well-established equity measures were administered to data including capital outlays, weighted per pupil capital outlays, instructional facilities allotments, and school district wealth. Horizontal equity measures included the McLoone index, the Verstegen index, the federal range ratio, and the coefficient of variation tests. The Odden-Picus Adequacy index (OPAI) was administered to determine levels of vertical equity. Finally, wealth neutrality was determined utilizing the Pearson product-moment correlation test. Findings indicated that there were poor horizontal equity levels both in the top half and bottom half of the distribution of capital outlay spenders. A coefficient of variation test was administered to determine overall horizontal equity. While it did not indicate poor overall horizontal equity, the existence of extreme outliers in both halves of the distribution indicated that the dispersion of spending at the top and bottom of the distribution were inequitable. In fact, over the three year period of the study, fifteen percent of the top spending districts spent between forty and fifty percent of all capital outlay expenditures. Vertical equity was tested by implementing a court mandated equalization standard of eighty-five percent. When the OPAI was administered at this equity level, vertical equity was poorer than horizontal equity. Finally, while some state implemented facilities funding mechanisms were wealth-neutral, the overall funding system, with its heavy reliance on bonded indebtedness, was not.
